Labor has called on the Turnbull government's cabinet secretary Arthur Sinodinos to stand aside following the "extraordinary finding" of the NSW Electoral Commission on illegal donations to the NSW Liberal Party.

Senator Sinodinos was finance director and treasurer of the party at the time, and evidence given to an earlier Independent Commission Against Corruption inquiry raised concerns about his "involvement" in the matter, the commission's chairman Keith Mason said.

"This is an extraordinary finding," he said. "Mr Turnbull should stand Arthur Sinodinos aside unless he and [the] NSW Liberals provide the names of the anonymous donors to the NSW Electoral Commission. He should not take his place in Mr Turnbull's inner circle or cabinet until this occurs."

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Mr O'Connor said Senator Sinodinos still had questions to answer about his time as treasurer of the NSW Liberal Party.

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A cloud has hung over the frontbencher's head since his appearance before an ICAC inquiry into the business dealings of the Australian Water Holdings, an Eddie Obeid-linked company on whose board Senator Sinodinos served.

Senator Arthur Sinodinos is a former finance director and treasurer of the NSW Liberal Party. Photo: Rob Homer

Senator Sinodinos denies any wrongdoing in relation to AWH and is not expected to face corruption findings when the ICAC hands down its report. It is not yet clear if the watchdog will make critical comments about his time as non-executive chairman of the company. Former shareholders also dropped a legal case against him last year.

He stood aside as assistant treasurer in early 2014 when the matter came before ICAC, before formally resigning the position in December of that year. The then prime minister Tony Abbott said he looked forward to Senator Sinodinos' return to the ministry, which eventually took place under Mr Turnbull's leadership when he became cabinet secretary.

Acting shadow attorney-general Brendan O'Connor says Senator Sinodinos still has questions to answers about his time as party treasurer.

Labor called on Mr Turnbull to follow Mr Abbott's lead from two years ago and stand Senator Sinodinos aside. "If he doesn't, his standard for ministerial accountability is lower than Abbott's," Mr O'Connor said.

A spokesman for Senator Sinodinos said it was a matter for the NSW Liberal Party and that questions about his future should be directed to the Prime Minister.